California

Jeremy Rozansky

The Problem and Promise of Charter Cities

What bankrupt San Bernardino, Stockton, and Vallejo have in common

August 17, 2012

The city council of San Bernardino, which recently declared bankruptcy, has long been divided between two factions—one siding with Mayor Pat Morris, the other with Jim Penman, the long-serving city attorney who twice ran against Morris for mayor. But on August 6, the division exploded into a constitutional crisis after Morris vetoed Councilwoman Wendy McCammacks proposal to give Penman the power to negotiate with refuse-management contractors. The veto was perfectly legitimate: San Bernardinos charter lets the mayor veto ordinances that pass, as McCammacks did, with fewer than five council votes. But Penman defiantly pledged to go ahead with the negotiations anyway. Only a few days later did he agree to let the veto stand.

The fact that the city attorney could refuse to abide by the rules is evidence that San Bernardinos city charter is a template for dysfunction. For one thing, though it gives the mayor that veto, it also gives the city attorney wide-ranging discretionary powers. As a result, San Bernardino, like the fallen Roman Republic, has two battling executives with overlapping discretion. But the charter is also to blame for San Bernardinos fiscal catastrophe. The primary drivers of the citys bankruptcy are the high salaries, and massive pensions based on those salaries, that the city pays its public employees. And the charter contains a provision that ties police and firefighter salaries to salaries offered by wealthier cities like Huntington Beach and Thousand Oaks, which have substantially higher tax revenues. San Bernardino is the second-poorest city in the United States, behind Detroit.

San Bernardino is not the first California city to declare bankruptcy, of course; Stockton and Vallejo preceded it. All three are charter cities, rather than general-law cities. The distinction is important. General-law cities are governed according to guidelines established by the state government, including restrictions on mayoral discretion and limits to city workers salaries. Charter cities, by contrast, are governed according to their own charters—a system that carries with it some drawbacks, notably in the realm of public salaries. Often, a city charter goes beyond San Bernardinos approach of tying pay to wealthier cities and actually leaves it limitless, inviting corruption. Rough-and-tumble Compton, which may follow San Bernardino into bankruptcy, is a charter city, as is Bell, a poor city of 36,000, which made national news in 2010 when the Los Angeles Times discovered that the city manager was making $788,000 a year and part-time city council members were paying themselves more than $100,000.

Just as charters can make cities worse, they may be able to make them better—it all depends on whos in charge. Morris and some other city leaders have tried to put charter reform on the local ballot, hoping to abolish the sections that inflate city workers pay and empower the city attorney to battle the mayor. Charter reform in San Bernardino could eliminate the citys doubling of the executive power by making the city attorney an appointed position, answerable to the mayor and council—who are, in turn, accountable to the voters. It could also eliminate the provision that sets city employee salaries so high. San Bernardino could mimic San Joses recent Measure B as well—a charter reform that forces current employees to pay their share into the existing pensions and makes needed structural changes to the citys budget. Former San Bernardino council member Tobin Brinker suggests an additional reform: a new line on the budget that shows how much pensions cost the city. These costs are currently hidden in the budget.

Charter reform wont be on the San Bernardino ballot this November, though, because the city council voted against it by a slim majority at the same meeting as the Morris-Penman blow-up over the waste-management contract. Good policy starts with good politics, and charter reform is crucial to both. San Bernardino needs more leaders who recognize that there is no way out of the mess without charter reform that improves both the citys political structure and its perilous balance sheet.

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